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Obama attacks Romney over auto bailout stance

(Reuters) – President Barack Obama attacked White House contender Mitt Romney on Tuesday over his opposition to the 2009 bailout of the auto industry, seizing on a vulnerability for the Republican candidate on a crucial voting day.

President Obama is greeted as he arrives to deliver remarks at the United Auto Workers conference in Washington, February 28, 2012. REUTERS/Kevin Lamarque

Speaking to auto union workers in Washington on the same day Romney faces a potentially pivotal primary vote in Michigan, home to General Motors and Chrysler, Obama trumpeted his rescue of the two major auto companies and accused Romney of wanting to abandon American workers.

Though he did not mention the former Massachusetts governor by name, Obama cited the title of a 2008 opinion piece Romney wrote called “Let Detroit Go Bankrupt” in which the Republican argued against a government-funded bailout.

Obama said if he had followed that approach, the workers who built the companies would have been “hung out to dry.”

He also referred to comments Romney made on Fox News Sunday this week in which said he favored a “managed bankruptcy” and criticized the amount of money that went to the United Auto Workers in the Obama administration’s intervention.

“You’ve got folks saying. `Well, the real problem is, what we really disagreed with was the workers, they all made out like bandits; that saving the American auto industry was just about paying back unions,”‘ he added. “Really? Even by the standards of this town, that’s a load of you-know-what.”

Romney’s 2008 opinion piece is a potential albatross for him in Michigan, where he was born and raised. Romney’s father was a popular governor there and before that ran an auto company.

Michigan, which along with Arizona holds a Republican primary on Tuesday, is seen as an important test for Romney, who is running neck-and-neck in the state with former Pennsylvania Senator Rick Santorum.

Although Santorum also opposed the auto bailout, Romney may be more vulnerable on the issue. Santorum, who has stressed his roots as the grandson of a coal miner, has had success courting blue collar voters in the state. Romney, a wealthy former private equity executive, has struggled with those voters.


Playing to an enthusiastic crowd at the United Auto Workers convention, Obama emphasized populist themes that his campaign hopes will resonate with middle-class workers in states likely to become battlegrounds in the general election.

“Don’t forget I got my start standing with working folks who’d lost jobs and hope when nearby steel plants closed down, because I didn’t like the idea that they didn’t have anybody to fight for them,” Obama said, reminding the workers of his background as a community organizer.

The 1,700 workers and other supporters gave Obama several standing ovations and chanted “Four more years!”

Since the $80 billion U.S. bailout of the auto industry, Detroit’s big automakers have moved from crisis to renewed profit. In 2009, GM and Chrysler were put through government-funded bankruptcies that slashed costs and debt.

GM, which returned to the stock market as a traded company in 2010, posted a 2011 profit of $7.6 billion. Its share price $26.37 is below its $33 initial public offering price of November 2010. The U.S. Treasury still owns about a quarter of the top U.S. automaker.

Chrysler came out of its bailout managed by Italy’s Fiat SpA, which last year took majority ownership. In 2011, Chrysler reported a full-year net income of $183 million and forecast $1.5 billion in profit in 2012.

Proponents of the bailout say it saved GM and Chrysler from liquidation and avoided a chain of bankruptcies in the auto supply sector that could have cost hundreds of thousands of jobs.

Ford avoided bankruptcy by borrowing heavily in 2006 before the credit markets froze. It was helped in its turnaround by low-interest loans from the Department of Energy.

Whether Romney or Santorum is the nominee, the Obama campaign is increasingly confident of its support in Michigan, in part because of the auto bailout issue.

But Obama’s advisers hope that the message about fighting for the working class will also play well in other Midwestern states with large numbers of blue-collar workers such as Ohio and Pennsylvania.

(Additional reporting by Alister Bull, Samson Reiny and John Crawley in Washington and Bernie Woodall in Detroit; Editing by Vicki Allen and Cynthia Osterman)

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Obama attacks Romney over auto bailout stance